bumiputera economic transformation roadmap 2.0

2.0
UNIT PENERAJU AGENDA BUMIPUTERA Aras 5, Menara Surian, No 1, Jalan PJU7/3, Mutiara Damansara, Selangor Darul Ehsan
unit peneraju agenda bumiputera - teraju terajuofficial terajuofficial terajuofficial
www.teraju.gov.my
Teraju Cover ENG NEW 2.indd 1 11/04/2017 11:49 AM
b BUMIPUTERA ECONOMIC TRANSFORMATION ROADMAP 2.0
Published by UNIT PENERAJU AGENDA BUMIPUTERA Aras 5, Menara Surian No. 1, Jalan PJU 7/3 Mutiara Damansara 47810 Selangor Darul Ehsan
ALL RIGHTS RESERVED. No portion of this publication may be reproduced without written permission of the publisher. While every
effort has been made to ensure that the information contained herein is correct at the time of publication, TERAJU shall not be liable
for any errors, omissions or inaccuracies which may occur.
BUMIPUTERA ECONOMIC
TRANSFORMATION ROADMAP 2.0
CONTENTS 02 FOREWORD BY YAB DATO’ SRI MOHD NAJIB TUN HAJI ABDUL RAZAK, PRIME MINISTER OF
MALAYSIA: PAVING THE WAY FOR A NATIONAL BUMIPUTERA AGENDA
06 FOREWORD BY YAB DATO’ SERI DR. AHMAD ZAHID BIN HAMIDI, DEPUTY PRIME MINISTER OF MALAYSIA: HARNESSING OUR STRENGTHS
10 FOREWORD BY YB DATUK SERI ABDUL RAHMAN DAHLAN, MINISTER IN THE PRIME MINISTER’S DEPARTMENT, ECONOMIC PLANNING UNIT AND CHAIRMAN OF UNIT PENERAJU AGENDA BUMIPUTERA (TERAJU) EXECUTIVE COMMITTEE: GALVANISING BUMIPUTERA ECONOMIC EMPOWERMENT
14 STATEMENT BY DATO’ HUSNI SALLEH, CHIEF EXECUTIVE OFFICER OF TERAJU: PIONEERING BUMIPUTERA ECONOMIC TRANSFORMATION IN LINE WITH NATIONAL GOALS
20 CHAPTER 1. OVERVIEW OF THE BUMIPUTERA ECONOMIC TRANSFORMATION ROADMAP (BETR) 1.0
42 CHAPTER 2. IMPACT OF BETR 1.0 PROGRAMMES AND PROGRESS OF ACHIEVING BUMIPUTERA OBJECTIVES
104 CHAPTER 3. BETR 2.0: DELIVERING IMPACT THROUGH DEFINED PRINCIPLES & POLICIES
118 CHAPTER 4. BETR 2.0: AN OVERALL FRAMEWORK
142 CHAPTER 5. JOURNEYING BEYOND THE HORIZON
148 NATIONAL TRANSFORMATION 2050: VIEWS FROM THE NEW GENERATION
150 ACKNOWLEDGEMENTS
152 LIST OF BETR 2.0 LAB MEMBERS
PAVING THE WAY FOR A NATIONAL BUMIPUTERA AGENDA YAB DATO’ SRI MOHD NAJIB TUN HAJI ABDUL RAZAK Prime Minister of Malaysia
02 BUMIPUTERA ECONOMIC TRANSFORMATION ROADMAP 2.0
ON 26 NOVEMBER 2011, THE GOVERNMENT LAUNCHED THE BUMIPUTERA ECONOMIC TRANSFORMATION
ROADMAP (BETR) TO INTENSIFY BUMIPUTERA WEALTH CREATION IN TANDEM WITH MALAYSIA’S TRANSFORMATION
INTO A HIGH-INCOME NATION BY 2020.
03BUMIPUTERA ECONOMIC TRANSFORMATION ROADMAP 2.0
BETR builds upon the initiatives and successes of the Bumiputera agenda introduced via the New Economic Policy (NEP) in 1971. In 2013, we launched the Bumiputera Economic Empowerment (BEE) programme to achieve the objectives of the BETR, focusing on empowering human capital, increasing ownership of corporate equity, strengthening ownership of non- financial assets, enhancing entrepreneurship and business and improving the service delivery system.
A number of initiatives have been implemented under BETR from 2011 to 2016, which we have termed BETR 1.0 to denote the first horizon of the new Bumiputera agenda. These initiatives were entrusted to Unit Peneraju Agenda Bumiputera (TERAJU) as the Secretariat to the Bumiputera Economic Council (which replaced the Bumiputera Agenda Action Council in 2013) to lead, coordinate and drive Bumiputera economic participation.
These programmes have benefited all levels of the Bumiputera community by providing assistance to underprivileged students, budding entrepreneurs and growing businesses. To date, this aid has included RM260 million channelled to provide scholars under Yayasan Peneraju Pendidikan Bumiputera (YPPB) with access to quality secondary and tertiary education. Additionally, the BETR has created RM108 billion worth of business opportunities, funding, human capital development, private investment and value creation through initiatives undertaken by various ministries, Government agencies, the private sector, Non-Governmental organisations (NGOs) and the regional economic corridor development authorities.
I am proud of TERAJU’s successful implementation of BETR 1.0. This is proven by the large number of entrepreneurs nurtured by TERAJU’s programmes. The efforts of BETR 1.0 are thus in line with Malaysia’s transformation into a high-income nation by 2020.
I am pleased to launch BETR 2.0 which marks an expansion of the activities under BETR 1.0 to a national level.
It is the Government’s hope that with BETR 2.0 in place as well as the blueprint and achievements from BETR 1.0 under our belt, the livelihood of Bumiputera will continue to improve in tandem with our high-income aspirations.
I would like to congratulate all the participants of BETR 1.0 and wish the very best to the participants of BETR 2.0.
YAB DATO’ SRI MOHD NAJIB TUN HAJI ABDUL RAZAK Prime Minister of Malaysia
HARNESSING OUR STRENGTHS YAB DATO’ SERI DR. AHMAD ZAHID BIN HAMIDI Deputy Prime Minister of Malaysia
AS THE BUMIPUTERA ECONOMIC TRANSFORMATION ROADMAP (BETR) ENTERS A NEW HORIZON, WE MUST REMAIN MINDFUL THAT THE BUMIPUTERA AGENDA IS NOT ONLY FOR BUMIPUTERA, BUT ALSO THAT IT IS A
CRUCIAL COMPONENT OF THE MALAYSIAN AGENDA. THE DIVERSITY AND HARMONY OF OUR FAIR NATION IS ONE OF OUR MOST VALUABLE STRENGTHS, WHICH
THE BUMIPUTERA AGENDA SEEKS TO FORTIFY.
Adopting the Bumiputera agenda as a national agenda however still requires a change in mindset. Thus, under BETR 2.0, companies which have benefited from Government support will be encouraged to adopt policies which harness the diversity of Bumiputera by providing equitable opportunities to women, Sabah and Sarawak Bumiputera, youth, as well as other Bumiputera companies.
This diversity policy should serve to enable these segments of the Bumiputera community to compete for employment, entrepreneurship development and business opportunities, as well as to enhance their leadership and strategic positions in large companies. It will also leverage the rich multiplicity of our country to widen opportunities for Bumiputera wealth creation while contributing to balanced socioeconomic development.
Competitiveness of the Bumiputera community also remains a key theme of the BETR in its second phase. This is as the global economic landscape continues to evolve rapidly, with the growing expanse of the digital economy representing a vital trend moving forward. In line with Malaysia’s national economic and development plans, Bumiputera must be prepared to compete amid a fast-paced environment to identify and capture new opportunities for growth.
It is for these reasons also that we must renew our efforts on education and professional development, to ensure the outcomes of BETR take root among the future generation of Bumiputera. It is in this way that we can ensure we address the fundamental areas of Bumiputera economic empowerment to realise a sustainable impact.
Indeed, much of our efforts under BETR are geared towards the future as we seek to uncover new, brighter horizons for the Bumiputera community in tandem with Malaysia’s transformation into a high-income nation by 2020.
In achieving Malaysia’s aspirations, I encourage all parties to remain engaged on the Bumiputera agenda and continue working with the Government in our journey to create fair and equitable opportunities to deliver on the best interest of all Malaysians.
YAB DATO’ SERI DR. AHMAD ZAHID BIN HAMIDI Deputy Prime Minister of Malaysia
GALVANISING BUMIPUTERA ECONOMIC EMPOWERMENT YB DATUK SERI ABDUL RAHMAN DAHLAN Minister in the Prime Minister’s Department, Economic Planning Unit and Chairman of TERAJU Executive Committee
THE BUMIPUTERA ECONOMIC TRANSFORMATION ROADMAP (BETR) LAUNCHED IN NOVEMBER 2011
AND INITIATIVES UNDER BETR 1.0 IMPLEMENTED FROM 2011-2016 HAVE GALVANISED THE BUMIPUTERA
AGENDA TOWARDS FURTHER IMPROVING OUTCOMES FOR BUMIPUTERA. WE HAVE SEEN ITS INITIATIVES
UNLEASH NEW PATHWAYS TOWARDS WEALTH CREATION FOR INDIVIDUALS, ENTREPRENEURS, SMALL- AND-MEDIUM SIZED ENTERPRISES (SMEs), BUSINESSES
AND EVEN GOVERNMENT-LINKED COMPANIES (GLCs).
As we embark on BETR 2.0, it is vital that efforts to drive the Bumiputera agenda expand beyond the Government’s own initiatives. The Bumiputera community as a whole should play a role in empowering the Bumiputera economy. This is to ensure the agenda continues to create lasting impacts across the breadth and depth of the national economy.
Anchored on increasing the mean monthly income of Bumiputera through high-value jobs, BETR 2.0 aims to crystallise the Government’s vision of making the Bumiputera agenda a national agenda – one which places emphasis on the socioeconomic prosperity of our people.
This has been achieved through TERAJU’s 27 main programmes including Skim Usahawan Permulaan Bumiputera (SUPERB), Facilitation Fund (Dana Mudahcara), Carve-Out and Compete as well as the High-Performing Bumiputera Companies (Syarikat Bumiputera Berprestasi Tinggi - TERAS) programme, which reflect the Government’s commitment to support Bumiputera at all levels.
Implemented by TERAJU under the stewardship of the Bumiputera Economic Council which is chaired by the YAB Prime Minister, these programmes have provided job opportunities, funding to promote business expansion and private investment and human capital development. These programmes are also implemented in collaboration with state governments and regional economic corridor authorities, among others – all towards BETR’s objective of elevating the position of Bumiputera to ensure socioeconomic equitability in our national economy.
The Government is always prepared to further enhance the development of Bumiputera and remains committed to realising the aspirations of the Bumiputera Economic Empowerment (BEE). It is my greatest hope that successful beneficiaries of the programmess carried out under the Bumiputera agenda will continue to contribute in helping Bumiputera by creating job and business opportunities, developing talent by providing training and consulting, distributing financial aid through the form of scholarships and sharing of knowledge and experience to aspiring players in the industry.
As we move closer to achieving our goal of becoming a high-income nation by 2020, I truly hope all agencies and beneficiaries will continue to work together towards new horizons for Bumiputera through BETR 2.0.
YB DATUK SERI ABDUL RAHMAN DAHLAN Minister in the Prime Minister’s Department, Economic Planning Unit and Chairman of TERAJU Executive Committee
PIONEERING BUMIPUTERA ECONOMIC TRANSFORMATION IN LINE WITH NATIONAL GOALS
14
BUMIPUTERA ECONOMIC TRANSFORMATION ROADMAP 2.0
WHEN TERAJU WAS FIRST SET UP IN 2011, WE WERE GIVEN A CLEAR MANDATE BY THE YAB PRIME MINISTER DATO’ SRI
MOHD NAJIB TUN ABDUL RAZAK TO PROCEED AT FULL SPEED TO LEAD THE DEVELOPMENT AND IMPLEMENTATION
OF THE BUMIPUTERA ECONOMIC TRANSFORMATION ROADMAP. PREMISED ON STRENGTHENING THE
PARTICIPATION OF BUMIPUTERA IN THE MALAYSIAN ECONOMY, THE BETR, LAUNCHED IN NOVEMBER 2011 AND IMPLEMENTED OVER A PERIOD OF FIVE YEARS IN ITS FIRST
PHASE (BETR 1.0), FOCUSED ON FINDING WAYS TO CATALYSE WEALTH CREATION, ACHIEVE A BALANCED
REPRESENTATION IN EMPLOYMENT IN HIGH-VALUE-ADDED AREAS AS WELL AS TO DRIVE ENTREPRENEURSHIP AMONG
THE BUMIPUTERA COMMUNITY.
Another key initiative aimed at increasing the participation of Bumiputera companies in mega projects at the national level is the ‘Carve-out and Compete’ programme. In an unprecedented approach to unlock opportunities for Bumiputera companies, TERAJU collaborated with Mass Rapid Transit Corporation Sdn Bhd (MRT Corp) to identify work packages under the MRT Line 1 (Sungai Buloh – Kajang) which could be awarded to qualified and capable Bumiputera contractors. This resulted in an allocation of 50% of the total work packages under MRT Line 1 for Bumiputera contractors, valued at RM10.6 billion, which were awarded to 372 Bumiputera contractors through a competitive and transparent selection process.
BETR 1.0 has since achieved great strides in improving outcomes of the Bumiputera who make up almost 70% of our population. From 2011 to 2016, BETR 1.0 has created RM108 billion in employment opportunities, funding and investment.
This has been achieved through innovative programmes which do not merely rely on Government funding, but focus on leveraging private sector funding which creates multipliers that ensure a breadth and depth of outcomes for beneficiaries.
One of our flagship programmes includes TERAS, which has expanded beyond its core activity of identifying the best performers among Bumiputera companies. Launched in July 2011, the objective of the programme is to enable participating companies to gain access to new business opportunities, funding, talent supply as well as coordinate ancillary business advisory services provided by government agencies.
We have also transformed the way Bumiputera companies obtain financing and loans from financial institutions and banks. Based on the allocation of RM332 million from the Government, this has leveraged through multipliers into a financing facility worth RM3.14 billion, of which RM1.3 billion has been approved for disbursement. This innovative process has allowed more Bumiputera companies to receive assistance through Government institutions, reducing reliance on the Government and making more funds available through banks.
These programmes are just a few among many initiated by TERAJU to pave the way for the implementation of BETR on a national scale, which has now led up to the introduction of BETR 2.0. Though we should be proud of our achievements so far, we must not cease to explore new initiatives and introduce reforms to the existing instruments as well as forge new strategic partnerships to improve the welfare of all Bumiputera in Malaysia.
This is especially as the Bumiputera agenda remains closely aligned to goals and initiatives under the National Transformation Programme, as well as the Malaysia Plans for socioeconomic development.
Under BETR 2.0, we seek to collaborate more closely with ministries, GLCs, NGOs and the private sector to expand or tailor our programmes to their needs. BETR 2.0 will continue to focus on measuring the impact of needs and merit-based programmes and implementing initiatives in a transparent manner, all with an eye on achieving the newly identified True North of the BETR for Bumiputera to earn a mean monthly income of RM5,000.
We are confident that the lessons learnt from BETR 1.0 as well as its existing programmes can act as a blueprint for other agencies to emulate as we seek to ingrain the Bumiputera agenda throughout all levels of our economy.
At the same time, TERAJU is also looking to expand our horizon and play a significant role in promoting the Bumiputera entrepreneurs abroad through strategic partnership with multiple agencies and financiers such as Malaysia External Trade Development Corporation (MATRADE), the Malaysia Design Development Centre (DDEC), Export-Import Bank of Malaysia Berhad (EXIM Bank) and many more. Among the activities we are mulling include establishing TERAJU International, which will be responsible for facilitating export-ready Bumiputera companies into becoming regional/global players in their particular sectors through collaboration with strategic partners and financial institutions in providing enablers and assistance through various programmes in the form of capacity and capability building, business expansion, international marketing and joint ventures/ collaborations.
It is vital for TERAJU International to form a strong network with Malaysia’s major trading markets such as China, APEC/ASEAN, the United States and Western Europe through its multiple strategic partners and agencies such as the Ministry of International Trade and Industry/and the MATRADE to develop, facilitate and increase the penetration of Bumiputera companies into the export markets.
TERAJU aspires for this initiative to encourage the internationalisation of Bumiputera companies and entrepreneurs, enhance their competitiveness and promote an outward looking approach in doing their business, while championing Malaysian businesses on the global stage. Ultimately, we aspire for more international collaborations to be sealed between Malaysian Bumiputera companies with the world’s largest companies from different sectors.
We are also considering game-changing initiatives such as establishing a private equity arm to provide equity bridging assistance for mergers and acquisitions. This would be achieved by syndicating funds for Bumiputera assistance from all other Ministries, agencies and investment institutions. The funds would then be multiplied through the TERAS Fund model and be channelled to companies looking to scale up into their next growth stage.
As we begin an exciting new journey and reflect on the high points and the hardships we have undergone during BETR 1.0, I would like to take this opportunity to acknowledge the YAB Prime Minister Dato’ Sri Mohd Najib Tun Haji Abdul Razak for his foresight and leadership in steering the Bumiputera agenda. I would also like to extend my gratitude to the Bumiputera Economic Council and YB Datuk Seri Abdul Rahman Dahlan, Minister in the Prime Minister’s Department, Economic Planning Unit and Chairman of TERAJU’s Executive Committee.
My appreciation also goes to TERAJU’s Board of Trustees, strategic partners and collaborating agencies including Ministries and agencies, financial institutions, entrepreneurship development organisations, industry development organisations, regional economic corridor authorities, the private sector and NGOs.
DATO’ HUSNI SALLEH Chief Executive Officer of TERAJU
OVERVIEW OF THE BUMIPUTERA ECONOMIC TRANSFORMATION ROADMAP 1.0
C H A P T E R 1
The Bumiputera Economic Transformation is guided by six principles to ensure relevance and sustainability of the outcome of its initiatives:
The Bumiputera Economic Transformation Roadmap (BETR) 1.0 was launched in 2011 to deliver two key objectives – to create a Bumiputera talent pipeline that has the necessary capabilities and competencies to meet the demands of high-skilled jobs required in a high-income Malaysia; as well as to transform Bumiputera-owned businesses from operating in a small-scale and fragmented manner, to companies that have the capacity and core competencies to compete internationally. This Roadmap serves as a continuation of the Government’s effort in promoting the Bumiputera Agenda over the last 40 years under the New Economic Policy (NEP).
1
Market-friendly
Resources are to be optimally allocated and shall not cause, contribute or perpetuate economic distortions. It should also ensure that all stakeholders benefit from initiatives.
2
Needs-based
While each stakeholder within the Bumiputera community have differing levels of needs, specific gaps among the bottom 40% households and disadvantaged groups will be identified to ensure initiatives address targeted issues to narrow the gaps among the different levels of the community.
3
Merit-based
Initiatives will be designed in a manner that encourages competition and business opportunities will be awarded to qualified and capable individuals and businesses.
6
Sustainable competitiveness
Policies and programmes designed moving forward must enhance market access and enable Bumiputera to compete to ensure sustainable outcomes which enable less reliance on Government.
4
5
Transparent
Pro-growth
Policies, procedures and criteria of programmes and initiatives will be made clear to the public. Programmes to increase Bumiputera participation are clearly integrated into the national development master plans as a national agenda, with programme beneficiaries also communicated to the public.
Programmes designed will be geared towards promoting overall sector growth as well as Bumiputera participation in the sector while ensuring the public is not burdened. Additionally, Bumiputera companies which benefit from the programmes should contribute to the national economy to ensure a multiplier effect from the initiatives. Furthermore, BETR programmes must enhance their participation in the country’s strategic sectors.
The roles of the Council are as follows:
• Ensuring speedy and effective results – includes reviewing existing Bumiputera development initiatives to strengthen Bumiputera entrepreneurship, participation in high-income jobs and develop capacity for wealth creation;
• Enhancing Bumiputera institutional effectiveness – reviewing existing institutions involved in delivering the Bumiputera Economic Transformation, rationalising the functions of these institutions and ensuring that mandate and skills sets are relevant in the current context;
Leading the way for Bumiputera Economic Empowerment
The BETR is implemented under the stewardship of the Bumiputera Economic Council, which leads, coordinates and drives Bumiputera economic participation through existing and new initiatives. Chaired by the YAB Prime Minister, the Council is also tasked with formulating institution reforms to increase the effectiveness of Bumiputera economic empowerment programmes.
The Council was established with a view to initiate game-changing strategies to elevate outcomes for Bumiputera. In line with this, TERAJU as the Secretariat to the Council was set up to operationalise these strategies and lead the implementation of the BETR.
• Programme management and active support – TERAJU will work with other agencies to detail out new programmes, identify and solve implementation bottlenecks, escalate to the Council for decision making; and
• Impact assessment – ensure clear aspirations and targets are set across key focus areas of employment, entrepreneurship and wealth creation and assess impact of initiatives and refine implementation strategies.
The Council meets on a monthly basis and to date has held 43 meetings equivalent to 140 hours since 2011.
The Bumiputera Agenda outlined in the BETR is consistent with the National Transformation Programme at large, which transcends across ministries and priority sectors. The implementation of the Bumiputera Agenda is accelerated through exploration of new initiatives and introducing reforms to the existing instruments. In addition, to ensure full collaboration among various parties involved in driving the implementation of Bumiputera economic development initiatives, TERAJU ensures coordination through strategic partnerships with government agencies, private sector and non-governmental organisations (NGOs).
strengthen their corporate strategies, undertake mergers and acquisitions (M&A) and institutionalise their practices with a view of increasing their market capitalisation.
In line with this principle, Permodalan Nasional Berhad (PNB) had also launched Amanah Saham Bumiputera 2 with a fund size of RM10 billion in April 2014, targeting young Bumiputera aged 19 to 34.
3) Increasing Bumiputera corporate control and sector participation to drive Bumiputera vendor and employment in high-potential sectors. For example, TERAJU has worked with large infrastructure project owners to implement a Carve-Out and Compete policy where viable segments within large infrastructure projects can be carved out and awarded accordingly to the best qualified Bumiputera companies.
BETR 1.0 Initiatives
The overall framework of BETR 1.0 is implemented according to the following three principles:
1) Building capabilities:
• Setting up Yayasan Peneraju Pendidikan Bumiputera (Yayasan Peneraju) to provide intervention and support for Bumiputera across all levels and types of education
• Reinvigorating Institut Keusahawanan Negara (INSKEN) to increase the capability of entrepreneurs
2) Enhancing the value of Bumiputera- owned assets such as financial assets, property and corporate equity through institutional pooling of funds and more effective management. Through programmes such as Skim Jejak Jaya Bumiputera (SJJB), TERAJU provides targeted assistance to companies to
In implementing the BETR 1.0 initiatives, TERAJU consistently adopted the following set of principles:
Creating multiplier effect from government funding allocation
In the past, Government industry and entrepreneur development agencies would directly give out funding in the form of loans or grants to companies. This was necessary at that point in time, because private sector banks were less willing to lend to SMEs and Bumiputera companies in particular were getting poor coverage. However, as the banking system matured, Malaysia now has several strong development financial institutions and private sector banks are also increasingly lending to SMEs. TERAJU’s approach is to partner with these banks in the provision of loans to Bumiputera companies, for example through the TERAS Fund, which is provided for TERAS companies for the purposes of working capital and asset financing.
This approach has several benefits:
• banks use the funds provided by Government as collateral and in return lend more than 9.4 times the amount
• it does not crowd out the private sector while also complementing financial institutions’ existing offerings
• loans are monitored through Bank Negara Malaysia’s Central Credit Reference Information System (CCRIS) system, making it easier for lending institutions to detect companies involved in non- performing loans
• imposes market discipline on borrowing companies
• partner financial institutions are monitored in terms of their disbursal success rate. Some banks perform better than others, enabling future allocations to be calibrated accordingly.
Amount of loans available and approved – TERAS Fund (2012-2016)
RM million
Over 42% of loan amount has been committed
collateral provided by TERAJU to banks
RM332 million
funds available for loan to TERAS companies
RM3.14 billion
Total loans available RM1.84 billion
By working with banks, TERAJU has multiplied the amount of loans given to Bumiputera companies, over and above the Government allocation
1
Policy-maker: This role involves assessing issues in a fact-based manner and advising the Government on policy measures required to address such issues. It also involves assessing effectiveness of on-going programmes in meeting the policy objectives.
2
3
4
One-stop centres: Increasingly, the Government is using a one-stop centre model where representatives from multiple delivery agencies are grouped together in one location for the convenience of the user.
Delivering through Partnerships
TERAJU recognises that the ecosystem from policy-setting to programme delivery consists of multiple agencies that play different roles:
TERAJU’s role is at the policy advisory and programme development level. Our principle is to work with delivery partners to run the programmes in order to avoid duplication of resources. Additionally, the delivery partners allow us to broaden our geographical reach and access to diverse stakeholder groups. For example, RM20 million has been channelled via TERAJU to 14 selected NGOs to undertake Bumiputera entrepreneur development programmes.
TERAJU@Corridor is another effort for TERAJU to extend our reach by partnering with all corridor agencies to ensure that programmes are accessible across all regions and support Bumiputera companies in line with the development goals of each regional economic corridor. Through the Bumiputera Entrepreneur Development Fund (Dana Pembangunan Usahawan Bumiputera - DPUB), around 9,394 entrepreneurs have benefited from RM75 million in funding disbursed to the regional corridor authorities,
namely the Northern Corridor Implementing Agency (NCIA), East Coast Economic Region Development Council (ECERDC), Iskandar Regional Development Authority (IRDA), Sabah Economic Development (SEDIA) and Sarawak’s Ministry of Industry and Entrepreneurial Development, Trade and Investment.
RM15 Million has been allocated for each regional corridor authority under the DPUB programme to be channeled to small and micro-entrepreneurs to empower the participation and involvement of Bumiputera micro-entrepreneurs in the field of entrepreneurship through strategic initiatives and programmes.
The programme’s objectives are as follows:
• To expand business opportunity for micro and small entrepreneurs.
• To build and strengthen the capacity in connection with the skills, funds, and infrastructure in specific industries such as agro-based industries, tourism, retail and manufacturing.
• To create Bumiputera employment for skilled/semi-skilled, professional and managerial levels.
• Assist in providing retail/business premises for entrepreneurs.
• Assist in provision of equipment/ machinery for entrepreneurs.
• Provide soft-loan programme/scheme in collaboration with commercial banks for working capital.
Besides the DPUB programme, TERAJU collaborates with the Corridor authorities to implement the Facilitation Fund programme in which to date, RM1.59 billion has been approved for 469 projects located nationwide.
At the same time, partnering with financial institutions and existing agencies for delivery of funding-related programmes helps ensure streamlined use of resources within Government.
TERAJU has partnered with SME Bank, RHB Islamic, Maybank Islamic, Malaysia Debt Ventures Berhad and MIDF for the delivery of the TERAS Fund programme, and with Majlis Amanah Rakyat (MARA) for the Baron Fund programme, which is targeted at helping Bumiputera acquire corporate equity (for example, in a management buy-out situations). A collaboration with Bank Rakyat was established to assist in funding of cooperatives, while PROSPER TERAS was set up as a collaboration with Perbadanan Usahawan Nasional Berhad (PUNB) to assist high-performing Bumiputera retailers.
In terms of capability development, partnerships with entities such as Construction Industry Development Board (CIDB) was established, to set up the Centre of Excellence for the Construction Industry to enhance the skills of local workers in the construction sector through training and knowledge-sharing.
Other programmes delivered through partnerships also include:
• Bumiputera SME Equity Financing Programme (BASE) with SME Bank which aim to provide equity financing to credible Bumiputera SME companies. This allows the companies access to financing for equity acquisition for the purpose to take over, control and expand or diversify its businesses
• Pre-Export Capacity Building Programme with Design Development Centre (DDEC) to assist Bumiputera entrepreneurs in brand building and development activities especially in branding, packaging and labelling as well as foreign market reach via product exportation
• The Bumiputera Business Expansion Fund (BEF) in collaboration with Malaysian Technology Development Corporation was introduced to assist Bumiputera entrepreneurs to expand their operations locally and internationally. The fund offers a combination of equity and loan-based financing
• Program Tunas Usahawan Belia Bumiputera (TUBE) with SMECorp, implemented through National Blue Ocean Strategy, involving various related ministries and agencies. TUBE aims to encourage Bumiputera youth to venture into entrepreneurship by providing coaching, advice and financial assistance through its Business Grant & Buddy System as well as Management Activity Programme
• The Bumiputera Technology Fund (BTF) with Malaysia Debt Ventures Berhad (MDV), which assists technology-based companies in an effort to facilitate their business expansion through shariah- compliant working capital and asset financing facilities
• Best Exporters Programme with SME Bank and MATRADE which targets export-ready companies, entrepreneurs and youth, offering support in funding and capacity building to enable Bumiputera entrepreneurs to be more competitive both at domestic and global markets
• Facilitation Fund under PUNB, which assists Bumiputera retailers to develop prominent local brands and acquire renowned international brands to enhance their industry competitiveness. The programme also aims to help Bumiputera retailers to establish their brands to provide a platform for enhancing their market accessibility in strategic premium locations and the global market
Meanwhile, as part of the equipment purchase aid scheme, Siti Azah bt Zakaria, a frozen food manufacturer, has seen her monthly income double after participating in the Programme. “I have increased my income following ECER’s support in securing assistance for the purchase of equipment from TERAJU,” said Siti, who is from Bachok, Kelantan. This scheme enabled her to acquire a mixer, steamer machine, freezer and gas fryer for her business needs.
“The scheme has helped me to expand my business and increase my stock.”
Siti Azah bt Zakaria
TERAJU@ECER
Bumiputera Micro-Entrepreneur Development Programme
The ECER Bumiputera Micro-entrepreneur Development Programme provides a number of assistance schemes through bank financing as well as aid for working capital, the purchase of equipment and infrastructure as well as funding for agriculture projects. These include a Retail Micro Financing Scheme provided by Maybank in collaboration with ECER. Among recipients of this scheme include health product business owner Bismillah bt. Mahmud from Kota Bharu, Kelantan.
“The scheme has helped me to expand my business and increase my stock,” said the micro-entrepreneur, who has seen a 110% increase in her annual earnings since becoming a recipient of the scheme.
Success Stories
The group of companies is wholly-owned by Dato’ Mohd Saffian Azizul Rahman and Datin Zawyah Md Yusof, alongside a few shareholders comprising long-serving employees.
Products offered by the MCMSB are certified by Tenaga Nasional Berhad (TNB) and Telekom Malaysia Berhad (TM), conforming to international quality standards, namely SIRIM Malaysia Standard (MS), British Standard (BS), International Electrotechnical Commission (IEC), Japanese Industrial Standard (JIS) and Japanese Automobile Standard Organisation (JASO).
The Group conducts all cable-testing in its own in-house quality control laboratories. It commissions world-renowned machineries and testing equipment namely; Rosendahl, Ets Pourtier, Setic, Ceeco, Henrich, Troester, Niehoff, Afa Industries, Dcm, Beta Lasermike, Aesa Cortaillod, Labotek, Hipotronics, Hubbell and others.
TERAJU@ISKANDAR MALAYSIA
MITTI CABLES MANUFACTURING SDN BHD (MCMSB)
MCMSB, a recipient of funding from Dana Mudahcara, is a Bumiputera company which manufactures various types of cables and wires. It is a TERAS company (given a 4-star SCORE rating by SME Corp) and is one of the earliest to be certified under the programme.
Establishment of MoUs Tied to Clear KPIs
As TERAJU works with partner agencies, we established MoUs tied to clear key performance indicators (KPIs) and programme outcomes which are monitored through monthly reports and TERAJU- Agencies joint review exercise held twice yearly (mid-year and year-end review). This ensures impact is monitored and when necessary, additional delivery partners can be brought in. MoUs are also used with
companies or entities receiving assistance; for example under the SJJB programme and the NGO funding programme.
In this case, the companies’ commitment to make certain improvements, for example in strengthening governance and financial management and in helping other Bumiputera is captured in the agreement and matched with Government assistance.
Fostering Competition
A primary aim of the BETR is to enhance the competitiveness of Bumiputera companies by unleashing opportunities for their participation in the Government’s mega projects. This is to help companies develop their track record while also providing a platform for TERAS companies which had demonstrated their capability and capacity in undertaking sizeable projects.
The key driver of this approach has been the implementation of the Carve-Out and Compete programme, which identifies a percentage of projects which can be allocated to Bumiputera companies which meet specific requirements based on the BETR’s six principles: market-friendly, needs and merit-based, transparent, competitiveness, pro-growth and sustainable development.
Under this programme, qualified Bumiputera companies must compete with each other to bid for contracts carved out from projects, with the award of contracts based on merit.
While Carve-Out and Compete assists the more established Bumiputera companies in accessing business opportunities, TERAJU also recognises the importance of enabling innovative ideas to surface and be given due consideration. To this end, we launched the Skim Usahawan Permulaan Bumiputera (SUPERB) programme in January 2014 with an initial fund size of RM100 million. SUPERB is a national competition run every quarter targeting start-ups (companies below three years) and individuals below 40 years of age who have innovative proposals.
Embedding the Bumiputera agenda as a national agenda
As one of the five pillars of BETR 1.0, Strengthening the Delivery System has paved the way for the Government to ingrain the Bumiputera agenda on a national level by driving its implementation through its Ministries.
This effort has been guided by the Bumiputera Economic Council (BEC), which now includes BEC Sabah and BEC Sarawak, and operationalised by TERAJU, with a Bumiputera Economic Empowerment Unit (Unit Pemerkasaan Ekonomi Bumiputera – UPEB) established in all 24 Ministries and the Prime Minister’s Department.
The UPEB are headed by a Director or Head of Unit who reports to the Bumiputera Economic Empowerment Committee of their respective Ministries. The Committee, in turn, is chaired by the Secretary-General or Deputy Secretary-General of the Ministry, which meets at least on a quarterly basis to monitor the implementation of the Bumiputera agenda at the Ministry level.
The implementation of KPIs is then monitored by the Bumiputera Economic Empowerment Monitoring Task Force, which is made up of representatives from the EPU and TERAJU and meets on a quarterly basis. The KPIs are then reported to the Bumiputera Economic Council, chaired by the YAB Prime Minister.
In addition to Ministry-level activities, TERAJU has also collaborated with and set the Bumiputera agenda to be implemented by GLCs and GLICs through Khazanah Nasional Berhad, which acts as the Secretariat for the Putrajaya Committee on GLC High-Performance.
MINISTRY-LEVEL REPORTING STRUCTURE OF BUMIPUTERA ECONOMIC EMPOWERMENT
YAB DATO’ SRI MOHD NAJIB BIN TUN ABD RAZAK
Chairman
HAMIDI
YBHG. TAN SRI DATO’ SERI UTAMA NOR
MOHAMED YAKCOP
YBHG. TAN SRI SHAHRIZAT BINTI
ABDUL JALIL
OMAR
YBHG. DATO’ SRI IDRIS JALA
YBHG. DATO’ DR NORRAESAH BINTI HJ
MOHAMAD
HJ. DAHLAN
ABDULLAH
Bumiputera Economic Council, Sabah
Sabah Chief Minister
YB Datuk Seri Abdul Rahman Dahlan Minister in the Prime Minister's Department
• EPU Sabah • TERAJU
• Members of Parliament 3 seats
• YB Datuk Haji Tawfiq bin Datuk Haji Abu Bakar Titingan Sabah Minister of Youth and Sports
• YB Datuk Haji Masidi Manjun Minister of Tourism, Culture and Environment
• YB Datuk Ramlee Marahaban Assistant Finance Minister
• YB Datuk Bolkiah Ismail Assistant Minister of Industrial Development
• Sabah State Secretary
• Director Yayasan Sabah
• CEO Institute for Development Studies (IDS)
• President Malay Chamber of Commerce Sabah
• President Sabah Chamber of Bumiputera Entrepreneurs
• President Sabah Chamber of Bumiputera Businesses
• President Kadazan Dusun Chambers of Commerce and Industry (KCCI)
Bumiputera Economic Council, Sarawak
FEDERAL STATE ENTREPRENEUR NGOs
• YB Sarawak Minister
• YB Sarawak State Legislative Assemblyman
• YBhg. Tan Sri Datuk Amar Wilson Baya Dandot CEO Sarawak Corridor of Renewable Energy (SCORE)
• YBhg Datu Haji Mohamad Abu Bakar Bin Marzuki Director State Planning Unit Chief Minister's Department
• Sarawak State Secretary
• YBhg. Tuan Haji Samat bin Junai Director Halal Hub Unit and Entrepreneur Development Unit
• Sarawak GLC
• General Manager Sarawak Economic Development Corporation (SEDC)
• YBhg. Datu Haji Abang Helmi Bin Ikhwan President Sarawak Chamber of Bumiputera Entrepreneurs
• YB Datuk Joseph Salang Gandum President Dayak Chamber of Commerce and Industry
• YB Dato’ Henry Jinep State Legislative Assemblyman N2 Tasik Biru
• YB Ripin Lamat State Legislative Assemblyman N72 Lambir
• Sarawak State Planning Unit • TERAJU
VICE CHAIRMAN JOINT SECRETARIAT
CHAIRMAN
YB Datuk Haji Mohd Naroden B Haji Majais Assistant Minister of Resource Planning and
Assistant Minister of Entrepreneur Development
YB Dato’ Sri Haji Fadillah Bin Haji Yusof Minister of Public Works/BEC Member
IMPACT OF BETR 1.0 PROGRAMMES AND PROGRESS OF ACHIEVING BUMIPUTERA OBJECTIVES
C H A P T E R 2
Anchored on initiatives undertaken through its five pillars, BETR 1.0 has recorded expansive impact during the period of its implementation (2011- 2016). These initiatives and impact further supplement activities undertaken outside of BETR, including private sector-led activities.
Objective: Increase Bumiputera income, reduce inequalities and foster national unity
Strengthening Delivery System
Strengthening Human Capital
2 Increasing
Corporate Equity
3 Strengthening
Human Capital
Initiatives under BETR 1.0 to enhance Bumiputera human capital have contributed to better outcomes for Bumiputera talent. This includes improvements in the number of students continuing on to tertiary education and in the grade point averages of graduates, with the percentage of scholars achieving a CGPA of more than 3.5 rising to 19% in 2015 from 14% in 2010.
The percentage of Bumiputera employed in high-value add occupations, as classified by the Department of Statistics Malaysia, has also increased from 17.8% in 2011 to 26.7% in 2015. This is as a result of the higher number of Bumiputera obtaining tertiary qualifications.
14% 19% >3.5
Distribution of Grade Point Averages, 2010 - 2015 Percent
Subsequently, Malaysia’s income equality has substantially improved and is now comparable to some developed countries. In tandem with this, income equality of Bumiputera is higher compared to other ethnic groups and has narrowed to 0.389 in 2014 from 0.440 in 2009. In addition to education outcomes, the improvement in income equality were also contributed by revisions in the salary scale of the civil service and GLCs, which previously lagged behind non-GLCs; the enactment of the Minimum Wage Order in 2012 and the Government’s direct assistance programmes such as Bantuan Rakyat 1Malaysia (BR1M).
Percentage of Bumiputera scholars with CGPA of more than 3.5: 2010 2015
14% 19%
Percentage of Bumiputera employed in high-value add occupations: 2010 2015
17.8% 26.7%
Yayasan Peneraju Pendidikan Bumiputera
TERAJU’s efforts with regard to human capital are implemented via Yayasan Peneraju Pendidikan Bumiputera (Yayasan Peneraju). Since its inception in 2011, Yayasan Peneraju has raised RM 260 million from Government and private sector. From this amount, Yayasan Peneraju has undertaken nearly 150 intervention programmes, focusing on enabling underprivileged Bumiputera students access to quality secondary and tertiary education, assisting Bumiputera youths without formal qualifications to obtain industry-recognised/ international certification and employed in high income sectors, and increasing the number of Bumiputera professionals.
After 5 years in operations, Yayasan Peneraju has enrolled more than 14,000 scholars. From this total, 3,000 scholars had been enrolled under the Peneraju Tunas thrust, 8,000 scholars enrolled under the Peneraju Skil thrust and another 3,000 scholars enrolled under the Peneraju Profesional thrust.
In 2016, 6,239 scholars were enrolled into 53 programmes, utilising RM110 million worth of funds. Highlights for 2016 include: 75% of scholars under Peneraju Tunas achieving a CGPA (or equivalent) scoring of above 3.0, 85% of scholars securing employment within their intended industry, as well as 70% of those employed earning targeted salary band under Peneraju Skill, and a passing rate of 80% for scholars under Peneraju Professional for their professional papers.
Peneraju Tunas Geliga
Auni Wadhiah Azahar, 15 years old, is from Kuala Terengganu, Terengganu. Her parents are divorced, and Auni currently lives with her mother, who works as a dressmaker, with a monthly salary of RM700. She is the youngest of three siblings, all of which are still studying. Despite familial and financial challenges, Auni had obtained straight A’s in her UPSR examinations. Shortly after, Auni became a Yayasan Peneraju scholar under the Peneraju Tunas Geliga programme, and continued her secondary education in SMKA Dato’ Haji Abbas in Kuala Terengganu, Terengganu. Conducive studying environment, as well as nurture and development and financial support from Yayasan Peneraju, had enabled Auni to strengthen her academic performance. In 2016, Auni obtained 11 A’s for PT3 examinations. She is currently in Form Four.
Success Stories
Peneraju Tunas Potensi (Overseas Pathway)
Siti Nur Mashitah Sufian, 22 years old, is from Rompin, Pahang. Her father is self-employed, while her mother is deceased. She is the eldest of seven siblings, all of whom are still in school. In the face of family commitments and financial constraints, Mashitah’s academic potential was evident. She obtained 9A’s and 1B in her SPM examinations. In 2012, she was accepted into the pioneer batch of Peneraju Tunas Potensi programme. With the support from Yayasan Peneraju, Mashitah continued to persevere and remained focused in realising her academic potential. Her hard work and commitment earned her the opportunity to study overseas, where she was accepted into the University of Queensland, Australia. After 2 years abroad, Mashitah became one of the first overseas Peneraju Tunas Potensi scholar to have completed the programme, graduating with Bachelor of Arts, majoring in Psychology.
Peneraju Tunas Potensi (Local Pathway)
Winnie Kariza Bakri, 25 years old, is from Tawau, Sabah. She is the eldest of five siblings. Her father is a retiree with an income of RM1,000 a month, while her mother is a full-time housewife. Although her initial ambition was to become a doctor, her average SPM results had led her towards the STPM pathway to obtain placement in public tertiary education. From here on, Winnie began slowing realising her potential, successfully balancing her studies and her curriculum activities. With STPM CGPA result of 4.0, Winnie was accepted as a Peneraju Tunas Potensi scholar, and continued her studies in Universiti Kebangsaan Malaysia (UKM) in 2012. Through Yayasan Peneraju’s continuous nurture and development, as well as financial support, Winnie continued to excel in her studies. In 2016, she graduated with a first class honours in Bachelor of Social Science (Hons) Geography, with a CGPA of 3.77. In February 2017, she completed her Masters
post-graduate degree in Environmental Management. Winnie is now working as a Gred 41 officer with the Ministry of Women, Family and Community Development.
Peneraju Skil – Iltizam Juruterapi Spa
Erelina David, 23 years old, is from Tambunan, Sabah. She is the third of ten siblings. Her father is a farmer, with an income no more than RM 1,000 a month, while her mother is a full-time housewife. Determined to ease her family’s burden, Erelina had enrolled in the Peneraju Skil Juruterapi Spa programme in October 2015 to gain the necessary skills and certification that could ensure employment. In April 2016, she completed the training and obtained her industry-recognised certification, and began working as a spa therapist in Legacy Spa, Penang in May 2016. Erelina is currently earning more than RM5,000 monthly, inclusive of commissions, tips and other incentives, and is finally able to financially assist her family. Emerging as an inspiring role model to her peers, Erelina hopes one day to be able to open a spa of her own.
Peneraju Skil – Site Safety Supervisor
Zulhaizam Mohd Noh, 40 years old, is from Terengganu. He is the second of nine siblings. Zulhaizam had been trained as an Electrical and Instrumentation (E&I) Pre- commissioning Technician in the oil & gas industry, with a respectable monthly salary between RM6,000 – RM7,000. However, due to the softening of industry and job market, as well as limited career opportunities, Zulhaizam decided to upskill himself through the Peneraju Skil Site Safety Supervisor programme. Upon completion of the programme, he is a certified Site Safety Supervisor employed by Lesus Engineering and earns an average monthly income of RM 10,000. Zulhaizam is married with three children, and is currently expecting a fourth child.
Peneraju Profesional – Akauntan Muda
Fathin Nur Amirah Mohd Nor, 20 years old, is from Hutan Melintang, Perak. She is the sixth of nine siblings. Her father has retired while her mother is a full-time housewife. A highly motivated student, Fathin scored straight A’s for SPM in 2015 and is an active member of the Silat Society. In 2015, Fathin had been accepted to become a Yayasan Peneraju scholars under the Peneraju Profesional Akauntan Muda programme. Fathin managed to complete her CAT foundation papers within one year, with an average score of 85%, and subsequently proceeded to undertake ACCA programme. In the December 2016 ACCA examinations, she achieved the highest score in Malaysia for F5 paper (Performance Management). Overall, Fathin had the 3rd highest score in the world. In recognising her achievements, she had awarded the World Prize by ACCA. Fathin is now more determined than ever to realise her dreams on becoming a chartered accountant.
Peneraju Profesional – Certified Financial Analyst (CFA)
Izulman Telimik is from Banting, Selangor. He is the twelfth of fourteen siblings. Both parents have retired. In 2013, Izulman accepted the offer to be part of the first batch of the Peneraju Profesional CFA programme. By June 2016, he was one of the six scholars who had successfully completed the programme, having passed all papers in one straight sitting. At the age of 28, he is the first scholar to be awarded the CFA charter and is now a member of CFA Society Malaysia. Izulman is currently attached to Celcom Axiata as Lead, Special Projects and Partnership.
Peneraju Profesional – Licensed Aircraft Engineer
Fikri Izzan Kip, 19 years old, is from Kuching, Sarawak. He is the fourth of five siblings. His father is a research assistant in MARDI while his mother is a full-time housewife. As a young boy, Fikri harboured aspirations of becoming an aerospace engineer. Fikri was first inducted as a scholar under the Peneraju Juruteknik Pesawat Berlesen programme in June 2016. However, due to his determination, consistent performance and passion, Fikri had been promoted into the Peneraju Jurutera Pesawat Berlesen programme in January 2017. Now Fikri more determined than ever to achieve his dream of becoming a licensed aircraft engineer.
INSKEN
Programmes conducted by INSKEN include:
• Coaching by Industry Players • Professionals Business Development • Start-up Business Accelerator Programme • Programme Outreach and Stakeholder
Engagement • Idea Generation/Business Fundamental/
Coaching • INSKEN 500 Intervention Programme • INSKEN Assessment Centre • INSKEN Talent Development • INSKEN SME Management Programme • INSKEN SME High Performing Public
Programme • INSKEN SME Regional Star Programme with
INSEAD • INSKEN Business Seminar/Knowledge Sharing • Biskaunselor Training and Development • Biskaunselor Enhancement Training
Programme
J&J Services Trading
J&J Services Trading Sdn Bhd was established in 1995 by Norjannah Ahmad, who is also the Managing Director of the company. Norjannah, 47, who is from Sarawak, ventured into the business of cleaning services when she was 25 years old. With RM4,000 capital from her personal savings, she was determined to start the business with only one employee. Her business focuses on cleaning services which include cleaning of office carpets, car seats and overall building cleanliness maintenance. Over the years, the business of this mother of two has started to make its name in Kuching, Sarawak and has recorded sales of up to RM1 million a month.
Since participating in INSKEN’s business consultancy initiative by Biskaunselor to help enhance Bumiputera companies and businesses, J&J Services Trading is now taking larger steps in business and is targeting for up to RM2 million in monthly sales in 2017. It has also benefited from two grants from SME Corp. Most recently, J&J Services Trading Sdn Bhd has expanded the scope of its business to supplying chemical cleaning supplies and currently employs a workforce of over 600 employees all over Sarawak. According to Norjannah, a friend of hers
once said that she lacks the ability and knowledge to run a business and her academic qualifications is only up to SPM, but that did not break her spirits to build her empire. In fact, she took that as a challenge and it became her drive to achieve success.
Success Stories
KAT Technologies
KAT Technologies Sdn Bhd is the largest prepaid card wholesaler and distributor in Malaysia in terms of gross monthly sales and coverage of distribution. The company was founded by YBhg Datuk Ir. (Dr) Khairol Anuar Mohamad Tawi.
Among the INSKEN programmes that Datuk Khairol has attended include the INSKEN SME Regional Star programme, which objective is to create awareness among SME entrepreneurs on the opportunities to expand their business to regionally and internationally.
Out of the several programmes carried out by INSKEN, Datuk Khairol is more keen on programmes which focus on creating business awareness. He believes that programmes that provide theoretical knowledge is important in the earlier stages of starting up a business, but once a company is ready to expand, programmes that involve interaction and sharing of experience among entrepreneurs will be more beneficial. Besides being able to network with other players in the industry and learn about the industry in greater depths, entrepreneurs will be able to create pathways to future business opportunities.
KAT was established in Kuala Lumpur in 1999, with three employees and a yearly sales of RM600,000. Since then, KAT has rapidly developed and in 2015, the company recorded RM853 million in sales. The current management and administration of the KAT Group is supported by 200 employees in 16 offices nationwide. The main prepaid card brand distributed by KAT is Celcom, and the other brands include iTalk (TM), TuneTalk, Merchantrade and Altel.
The KAT Group has received several awards throughout its 18 years in the industry. In 2015, KAT Group was awarded the PUNB “Anugerah Khas – Usahawan Unggul PUNB (SPARK 2015)”. More recently, in October 2016, one of KAT Group’s system and solution was recognised by APICTA as the winner of the “Retail & Supply Chain Management” category.
Siti Khadijah Apparel Sdn Bhd
Siti Khadijah Apparel Sdn Bhd was established in 2009, specialising in tailoring and sales of prayer clothing for women. Starting from a small shared with only 200 items in stock, Siti Khadijah Apparel Sdn Bhd has now expanded to 12 branches all over Malaysia, and one branch office in Jakarta, Indonesia. The Executive Chairman and founder of Siti Khadijah Apparel Sdn Bhd is Aminuddin Mohd Nasir.
Aminuddin has attended some of the programmes organised by INSKEN including the INSKEN SME Mergers & Acquisitions Programme, INSKEN SME Financial Management Programme and INSKEN SME Management Programme. Encik Aminuddin, is one the TERAS company entrepreneurs who is highly supportive of programmes carried out by INSKEN. He also sends his employees to attend the programmes.
He says that the INSKEN programmes that he has attended have given him greater insights on how to manage a company. The content of the programmes joined by Encik Amiruddin is engineered towards helping the management of a company understand the position of the company better and sharpen the process of evaluating choices and making decisions.
Among the practices that he is considering to adopt within his company after attending INSKEN’s high performance company programme includes the implementation of the KPI and key ratios systems to measure the effectiveness of operations, productivity and leverage. His company is also in the midst of identifying risks in all departments as part of the ISO 9001 initiatives and they are taking prudent steps to manage business risks.
Corporate Equity
The promotion of Bumiputera corporate equity was identified as a pillar under BETR 1.0 due to its role in catalysing employment of Bumiputera in management positions which provide higher pay, wealth creation through share value appreciation and dividend payments as well as drive the development of Bumiputera vendors through investment and procurement. Vendor development programmes, in turn, contribute to strengthening the Bumiputera sectorial supply chain.
As set out by the Malaysia’s national economic development plans, the Government targets for corporate equity ownership by Bumiputera of 30%. Up until 2014, Bumiputera-controlled market capitalisation, which accounts for the majority share of corporate equity ownership, increased by RM70 billion. It is important to note that efforts to enhance Bumiputera corporate equity ownership have mainly been market-led, in line with BETR’s market-friendly approach.
In order to facilitate participation in this market-driven activity in a way that does not disrupt the market, the SJJB and Teras programmes were implemented under the BETR to enable Bumiputera companies to record revenue growth over and above general market growth to help drive corporate equity ownership.
Skim Jejak Jaya Bumiputera (SJJB)
With the aim of providing corporate advisory to Bumiputera companies which have the potential to pursue IPOs, focusing on capacity building for the companies through comprehensive advisory solutions, the SJJB programme has facilitated the listing of 13 Bumiputera companies on Bursa Malaysia. The programme has also enabled value creation of RM7.8 billion.
In addition to listing, the programme was successful in assisting Bumiputera companies undertake M&As. These include Censof Holdings Bhd’s acquisition of a 51% stake of Singapore’s Asian Business Software Solutions Pte Ltd and its takeover of Dagang NeXchange Bhd (DNeX), formerly known as Time Engineering Bhd through the GLC asset divestment plan. The programme had also assisted DNeX in acquiring OGPC Sdn Bhd and UK firm Ping Petroleum Ltd.
Furthermore, through the SJJB programme, the following companies had increased their equity substantially via growth of their market capitalisation as follows:
Public Listed Company Market Cap upon Listing
(RM) Market Cap@31 Mar 2017
(RM) +/-
Datasonic Group Bhd – 9.45x 180 million 1.701 billion
Dagang NeXchange Bhd – 3.7x 180 million 688 million
GFM Services Bhd – 1.85x 162 million 300 million
Serba Dinamik Holdings Bhd – 1.2x 2 billion 2.4 billion
CENSOF HOLDINGS BERHAD
Censof Holdings Berhad (Censof) was established in 2008 and has become one of the leading Bumiputera companies in the accounting and technology industry with a growing portfolio of clients from the private and public sectors.
Its business is segmented into six division:
• Enterprise Financial Management Software
• Payment Gateway System
• ‘National Single Window’, Oil & Gas, and Energy
Its Enterprise Financial Management Software business is its largest revenue generator, providing solutions and maintenance services for some Federal Government agencies.
In 2015, Censof acquired 51% of Singapore’s Asian Business Solutions Software Ltd (ABSS) to expand its operations and market reach, leveraging ABSS’s portfolio of 340,00 customers in 11 Asian countries. This acquisition adds to the stable of companies Censof has acquired since 2012, including a 60% acquisition of PT Praisindo Teknologi, a web management company from Jakarta, Indonesia, its 80% takeover of Knowledgecom Corporation Sdn Bhd, a human capital development company which provides training and certifications for tertiary graduates, government staff and professional workers. Censof also acquired 49.2% of Dagang NeXchange Berhad (DNeX) (formerly known as Time Engineering Sdn Bhd) in 2015.
With its products, Censof aims to enhance efficiency within Government and to capture export markets.
“Our advice to other entrepreneurs is to keep developing their products and emphasise on constant improvement to stay resilient and competitive in the long-run.”
“There are many business opportunities in Malaysia in many technological fields. Entrepreneurs must be positive towards new technology like cloud technology, Mobile Technology and Internet of Things. These technologies will lead business into the 21st century.”
Datuk Samsul Husin
PRESTARIANG BERHAD
Established in 2003, Pestariang Berhad is a leader in the fields of talent, technology and education, providing a holistic chain of ICT services for talent & software licensing, technology & services as well as education through Malaysian University, Computer Science & Engineering (UniMy). We provide a comprehensive suite of services including training and certification, talent procurement and management, software license distribution and management services, software assets management and technology management.
DR ABU HASAN ISMAIL
As one of the participants of SJJB, Prestariang has set its sights on expansion into ASEAN. Following its listing in 2011 through the SJJB programme, it was included on the FTSE Bursa Malaysia Fledging Index in December 2011 and the FTSE4Good Bursa Malaysia Index 2014. It has also been named Best Under One Billion 2013/2014 Forbes Asia, Winner of Industry Excellence Award (ICT Services Category) from MITI and was listed in the Minority Shareholder Watchdog Group (MSWG)’s “Top 100 ASEAN Corporate Governance Scorecard for 2014”.
The company aspires to move away from being a company which relies on project- based business to one that is based on talent and technology which provides solutions and services on an international level.
Listed on
Bursa Malaysia in 2011
• Included on the FTSE Bursa Malaysia Fledging Index in December 2011 and the FTSE4Good Bursa Malaysia Index 2014
• Named Best Under One Billion 2013/2014 Forbes Asia
Prestariang fast facts:
DATASONIC GROUP BERHAD
Datuk Haji Abu Hanifah Noordin is the Managing Director and Executive Director of Datasonic Group Berhad. Datasonic is an ICT solution of products and services including smart card services (secure ID chips-based cards such as credit/debit/bank cards), software adaptation and hardware solutions, project management, consultancy, research and development and technical consultancy services.
Datuk Hanifah graduated from Universiti Malaya with an honours degree in Economics and has 20 years’ experience as an accountant. In 2005, Datuk Hanifah took over the management of Dibena Enterprise and in 2006, took over Datacard QSS Sdn Bhd (now known as Datasonic Corporation). This was followed by his taking over of Datasonic Technologies (formerly known as Guthrie Technologies Sdn Bhd) in 2007.
DATUK HAJI ABU HANIFAH NOORDIN
His vast experience in the field of finance and business has helped him expand the scope of business to include the MyKad, MyKid and passport system and becoming a provider of integrated ICT softwares, ICT services, project management, hardware systems and solutions, including the integrated city surveillance system known as the “Safecity”.
A farsighted man, Datuk Hanifah joined the Skim Jejak Jaya Bumiputera (SJJB) to move towards listing Datasonic on Bursa Malaysia. In 2012, with the help of SJJB, Datasonic was listed on Bursa Malaysia.
Datasonic’s market capitalisation has grown to over RM1 billion and 500 employees. At present, Datuk Hanifah is focusing on research and development of technology- based products such as nano batteries, electric cars and e-health systems. He is also planning to expand his business internationally.
Datasonic fast facts:
SEDANIA INNOVATOR BERHAD
Kumpulan Sedania Innovator is primarily involved in the business of telecommunication and IT, offering among others multimedia products and other relevant services.
Datuk Azrin Mohd Noor is the founder and CEO of Kumpulan Sedania. According to him, the biggest challenge that he has to face is to find talent that is trustworthy and has the innovative capacity to realise his aspirations and delivery products that meets the needs and expectations of consumers.
Datuk Azrin Mohd Noor is the founder and CEO of Kumpulan Sedania. According to him, the biggest challenge that he has to face is to find trustworthy and innovative talent to realise his aspirations and delivery products that meets the needs and expectations of consumers.
DATUK AZRIN MOHD NOOR
His ultimate vision for the company is to provide a platform and/or product that fulfils the needs and dreams of consumers and will continue to be used by consumers even when he is no longer around. To date, the most significant achievement of the company is the collaboration between Sedania Innovator and TuneTalk on the Airtime Share platform. This collaboration enables the sharing of talk time among TuneTalk prepaid mobile users. Besides that, the collaboration could also catalyse more innovative ideas in the future.
The SJJB programme has helped provide comprehensive consultancy to the company and created a huge impact when the company was listed on the ACE Market of Bursa Malaysia Securities on 29 June 2015.
This programme also advises and introduces a list of potential investment institutions to ensure the company has various groups of investors to be part of the company’s initial public offering (IPO) plan.
Datuk Azrin hopes this programme will continue to be carried out to ensure the effectiveness of the Bumiputera agenda initiatives, intensify business development and heighten economic participation and Bumiputera equity in the long run. His advice to ambitious entrepreneurs is to focus on one specific goal and work hard toward realising the goal.
TERAS
The TERAS programme was introduced in 2011 to identify and develop potential high-performing Bumiputera companies. Companies are selected based on their fulfilment of criteria, namely:
Established Bumiputera company with good financial track record
Minimum revenue of
Maintained net profitability for its last three years
Bumiputera ownership
of at least 60%
Additionally, the companies must not be a subsidiary of a GLC or MNC (although associate companies are eligible) and must record a SCORE rating of three stars and above by SME Corp, MDEC, CIDB or other certifying bodies. The companies must also employ Bumiputera as their CEO or managing director, with management team to be made up of mainly Bumiputera as well. Additionally, preference is given to companies involved in any of the National Transformation Programme’s National Key Economic Areas. Companies should also possess a good credit rating.
In terms of impact, an independent consultant assesses that 76% of 626 TERAS companies surveyed outperformed the revenue growth rate for their sector, the breakdown of performance according to sector as follows:
Breakdown of TERAS companies which outperformed the revenue rate of their sector (%)
Clear strategic direction 83% of companies have a written business plan
Financially supported
Dana Mudahcara
TERAS Fund
Focus on HR spending 39% spend more than 20% of operating expenditure on HR spending
Existence of export strategy 35% of companies are currently exporting
Bankable 89% approval rate for loan
Malaysia’s Income Gini Coefficient1
65%
15%
M.S. TIME SDN.BHD
M.S. Time Sdn. Bhd. (M.S. Time) is a company involved in the business of heavy mechanical lifting since its inception in 1955. The services of this company cover a wide range of industries including oil and gas, power plants, cement, iron and steel, marine and construction.
Datuk Seri Mohd Effandie Ahmad, founder of M.S. Time can now be proud of the company’s achievements since its establishment 21 years ago with only five employees. It now employs a headcount of 300 employees, of which the majority are Bumiputera. M.S. Times now also has branches all over Malaysia including in Penang, Miri, Terengganu, Lumut, Labuan, Johor and several branches in Kuala Lumpur.
DATUK SERI MOHD EFFANDIE AHMAD
“In 15 years of working with non-Malays, I was thinking, could I help my people? Can I provide education to my children without depending on the aid from the government? While working with non- Bumiputera companies I was able to bring encouraging total sales to the company that drove the company further, why not I set up my own company?”
Datuk Seri Mohd Effandie Ahmad
His entrepreneurial spirit arose from his desire to do and contribute more than what he has done at any given time. With that spirit, he established his own company able to compete in the local market.
In an effort to expand to new markets, M.S. Time applied for funding from TERAJU, and through the TERAS programme and Dana Mudahcara, was able to expand its machinery to 30 units of skylifts and 38 units of forklifts. The addition of these machines will open new business opportunities and enable the company to compete with other large companies.
As an entrepreneur, Datuk Seri Effandie believes that Bumiputera companies should not just depend on government projects, but also explore the market and business opportunities in the private sector. He also advises new entrepreneurs to be honest, committed and focused on their business.
At the same time, the entrepreneurs need to be tough and strong and not to easily give up when faced with challenges. He is also willing to help and guide new entrepreneurs who want to learn the ins and outs of business.
Success Stories
AUEI TERAS HOLDINGS SDN. BHD.
The company, which is based in Kota Bharu, Kelantan was established in 2005 and is involved in property development and investment. To this date, AEUI has successfully managed and completed projects worth more than RM25 million, with on-going projects worth more than RM35 million.
Its largest projects include the development of University Garden Condominium and Bazar Dragon Hypermarket in Kok Lanas, Kelantan. In addition, AUEI also owns a subsidiary that provides vocational training, Astonians International College of Skills and Technology recognised by the Ministry of Human Resources.
RITA SARBANI BINTI ISMAIL
The company joined the TERAS programme in 2014 and has since taken steps to take on larger value projects worth more than RM300 million, leveraging the financing provided through TERAJU.
As testament to the company’s success, Rita has been awarded the People Development Award under the category of Female Entrepreneurs organised by International Business Review Summit 2016. According to her, there are three main factors contributing to the success of AUEI: talent management, funding allocations for business growth and sufficient marketing and promotion.
“The biggest factor in ensuring the company to remain competitive and resilient does not come from TERAJU, but it comes within us. We have to grab all opportunities to take our success to the highest level,” she said.
“Entrepreneurs should not be waiting for projects from the government, but they should create their own projects to be implemented. Each company should aspire to be a game changer or a key player in the industry.”
Rita Sarbani binti Ismail
Entrepreneurship
Initiatives under the entrepreneurship pillar have been centred on financing business expansion. These were undertaken both directly through TERAJU as well as in collaboration with partner institutions. This has contributed to capacity building of entrepreneurs as well as businesses, in addition to fostering competitiveness. These initiatives are aimed at enabling entrepreneurs scale up along the growth stages of a business, with a view to nurturing entrepreneurs towards global market-readiness. At the same time, support for entrepreneurs helped to create self-employment opportunities, which represents another objective of Bumiputera entrepreneur development.
SUPERB
Skim Usahawan Permulaan Bumiputera (SUPERB) was introduced in 2014 to encourage innovation among entrepreneurs and assist start-ups by providing grants of up to RM500,000 to young entrepreneurs. To date, 6,255 participants have entered the competition, with 125 winners receiving RM62.5 million of funding. The funding is given to enable the winners to undertake industrial level proof of concept with potential customers to enable their product to move forward. In addition to providing funds, SUPERB also offers developmental services and commercialisation support which includes mentorship, training for competency building and possibly further funds from TERAJU’s Strategic Partners. TERAJU currently has 10 partners, namely, Bioeconomy Development Corp, Cradle Fund, Kumpulan Modal Perdana (KMP), Malaysia Venture Capital Management
Berhad, Malaysia Digital Economy Corporation (MDeC), Malaysia Debt Ventures (MDV), Malaysia Technology Development Corporation (MTDC), My Creative Ventures (MCV), PUNB and Technology Park Malaysia (TPM). TERAJU will, from time-to-time appoint new strategic partners when the opportunity arises.
It is important to note that in line with BETR’s principles, SUPERB winners are selected based on merit, and are chosen by a panel of successful business owners and entrepreneurs who have made a name for themselves in their chosen fields.
The judges include:
1. YBhg. Datuk Wira (Dr) Hj Ameer Ali bin Mydin MYDIN Mohamed Holdings Berhad
2. YBhg. Tan Sri Rozali Ismail Puncak Niaga (M) Bhd
3. YBhg. Dato’ Kamarudin Meranun AirAsia Berhad
4. YBhg. Dato’ Norman bin Abdul Halim KRU Capital Sdn Bhd
5. YBrs. En. Afzal Abdul Rahim Time dotCom Berhad
6. YBhg. Dato’ Hazimah Zainuddin Hyrax Oil Sdn Bhd
7. YBhg. Datuk Awang Buhtaman DPMM Sabah
8. YBhg. Datuk Mohd. Khay Ibrahim Zikay Group Sdn Bhd
9. YBrs. Tuan Haji Ali bin Hassan Al-Ikhsan Sports Sdn. Bhd
10. YBrs. Syahrunizam Samsudin Touch ‘n Go Sdn Bhd
11. YBhg. Datuk Noor Azrin bin Mohd Noor Sedania Group Sdn Bhd
12. YBhg. Datuk Seri Haji Syed Zainal Abidin WiEdu Sdn Bhd
13. YBhg. Datuk Noraini Soltan Sipro Plastic Industries Sdn Bhd
14. YBrs. En. Mohd Nizam Abd Razak Animonsta Studios Sdn Bhd
15. YBrs. En. Rashdan Ramlee Netcarbon Corporation
16. YBrs. En. Syed Naqiz Shahabuddin Bumiputra Retailers Organization (BRO)
17. YBhg. Dato’ Haji Ramly Mokni Ramly Food Processing Sdn. Bhd.
18. YBhg. Datuk Ir. Guntur Tobeng Gading Kencana Sdn. Bhd.
NURUZON TECHNOLOGY RESOURCES SDN. BHD.
The saying, ke mana tumpahnya kuah, kalau tidak ke nasi is a perfect representation for Muhamad Nuruzon, a SUPERB winner.
The heir to his father’s legacy, Wagiman Dulahabedi or Wak Wagiman who is renowned nationwide as an innovator for his success in creating machinery for agricultural use from recycled goods since 2001.
“My father only studied until primary six but he managed to create a multipurpose truck from used metal and sell it at a reasonable price to help independent farmers who can’t afford machinery transport trucks in the current market.
MUHAMAD NURUZON WAGIMAN 26 Years Old Muar, Johor
“I am only an SPM holder and spent a lot of time in workshops to learn how to repair vehicles. I am passionate in the automotive field and aspired to create multipurpose vehicles that can be exported to other countries,” says Mohd Nuruzon.
Through the SUPERB grant, he established Nuruzon Technology Resources Sdn Bhd in 2015; constructing a more systematic workshop which adopts Standard Operating Procedures (SOP) in manufacturing machinery; including the necessary purchase of equipments needed to make the machinery.
“I am grateful to TERAJU for giving me the opportunity to expand and enhance my machinery in hopes that it gives a positive impact to the agriculturists/agronomists.” he said.
Each machinery manufactured by Muhamad Nuruzon is unique with 80% of the materials made from metal. The multipurpose machinery is capable of carrying two to three tonnes of weight.
“We use a lot of hand tools in making the machinery. For instance if we want a round metal, we shape it by hitting the metal into a round shape, while for cutting metal plate, we use a metal grinder. Even so, we managed to make three machineries all at once.
“This company is in the process of testing our latest creation, a machinery for farm cleaning that uses a 1.5 tonne roller to compress the grass while allowing farmers to clean one-acre of land in a day,” he proudly said.
Success Stories
NURHIDHAS SDN. BHD. (CIPELA SHOES)
As an accountant, most of her day is filled with numbers. At night however, Nur Hidayah Hassan, founder of Nurhidhas Sdn. Bhd. of shoe brand Cipela Shoes, sees her dreams turn into reality.
Her obsession with shoes started after she received her first pair of leather shoes for Hari Raya when she was five years old. Spending her teenage years in Bosnia Herzegovina where she lived in near a shoe factory was what fuelled her dream to create locally produced shoes at international standards.
NUR HIDAYAH HASSAN 29 Years Old
Kuala Lumpur
“After living for 12 years in Europe, I came back to Malaysia five years ago to build my career as an accountant. At the time, I had a business startup, creating my own line of shoes with what little capital I have. And I noticed it is difficult to bring your own line of shoes so I started creating a fashion label called HiDY that focuses on kurti-like tunic dresses made of high quality cotton and linen.
“I was very active in direct sales, and often participated in bazaar and exhibition fairs to promote my brand in the market. It helped me gained a lot of customers and after a year of doing it part time, I became more financially stable and decided to pursue it full-time,” she said.
Inspired by the art of Italian shoe making, Nur Hidayah focuses entirely on making shoes and manufacturing in small batches depending on the customer’s request. She sells her handcrafted shoes under the brand CIPELA Shoes and promotes it along with her HiDY brand through ‘word of mouth’ and social media such as Instagram and Facebook.
“CIPELA itself means shoes in Bosnia, Croatia, Serbia and Brazil. Wearing handcrafted shoes in everyday life is a norm in the European society and I too hope of seeing it put into practice here.
“I had the idea to create shoes using our proud traditional heritage like batik and songket and make it comparable with the fine craftsmanship of handcrafted European shoes that can be marketable, both locally and internationally,” said Nur Hidayah.
“I am grateful to win the SUPERB grant because the fund I received has helped me upgrade my equipment and shoe making machinery. We only use imported high quality materials from around the world and high quality leather to produce the shoes.
“The grant has also enabled me to upscale my manufacturing while opening up more opportunities for me to establish relationships with other government agencies that can help me expand my business,” she explained
CIPELA has now designed more than 200 shoes for formal and casual use which highlights Malaysia’s traditional heritage of songket and batik.
Having won the “Broadband and Empower Entrepreneur Award” awarded by Malaysian Communications And Multimedia Commission (MCMC) last year, Nur Hidayah has since opened the first CIPELA boutique in Bangsar Shopping Centre, with aspirations to expand abroad.
“I hope to open a CIPELA boutique overseas and having international partnership in the commercialisation of our handcrafted shoes by 2017,” she added
“To young entrepreneurs, focus on your advantages and strength and know and understand your target market,” advises Nur Hidayah.
WATERBAY SDN. BHD.
His passion for entrepreneurship drove Mohd Azhan Ahmad from Pulau Pinang to venture into business at the young age of 25, running a variety of businesses before starting Waterbay Sdn. Bhd., a dentistry supplier.
After 16 years in the business, he can now savour his success with his products having gained the trust of companies including the Ministry of Health Malaysia (Dental division). Yet he continues to shock his employees with his obsession for the business.
“My obsession began when I was working with a private company that markets various dental products including mobile treatment chairs that are widely used in clinics and rural schools. I had the idea to create an automatic mobile treatment chair or ‘Stuhl’ after noticing two persons are needed to assemble that mobile chair and it took a long time build,” he said.
“I had fully devoted my life and energy into creating ‘Stuhl’ until I lost focus on my core business; I even used the company’s profits for the chair creation. Fortunately I became aware of it and instead, I strived to increase the company’s sales by setting aside a budget for research and development (R&D),” he continued.
Winning the SUPERB grant enabled him to increase his R&D team and expand the company’s engineering sector by increasing the employment of engineers and designers who excel in their relative field.
“With the help of the SUPERB grant, we successfully created ‘Stuhl’ 2.0, the first automatic mobile treatment chair in Malaysia. We created ‘Stuhl’ with a more ergonomic design, compact, high quality and user friendly, whilst giving us the confidence to try and market our products globally,” says Mohd Azhan.
“TERAJU has not only helped us in terms of funding but also provided us guidance and support in terms of skills and opportunity to expand our network with other agencies.
“The opportunity to win the SUPERB grant was not easy, because I had to try four times to convince TERAJU panels about my obsession. Alhamdulillah, without giving up, I made it to the finals and won the grant at the fifth attempt,” he said smiling.
Mohd Azhan feels proud as his obsession has led to the successful creation of the automatic mobile chair treatment that enables blood donation programmes and outdoor dental treatment clinics or hospitals to be done comfortably. “We aim to be innovators that cater to high-tech medical or dentistry products not only in Malaysia but also internationally,” he add

Documents

bumiputera economic transformation roadmap 2.0